While the Bank of England voted unanimously 9-0 to keep rates on hold at 0.5%, what the market was far more focused on the BOE’s latest gloomy scenarios about what would happen should the UK vote for Brexit on June 23. The BOE did not disappoint, and cautioned that that sterling could fall “sharply” and unemployment would probably rise, while in the press conference after the announcement BOE governor and former Goldmanite Mark Carney went all the way warning Brexit “could possibly lead to recession.”
That this takes place just days after UK’s David Cameron warned of a World War threat should the UK leave the EU is not surprising: after all the whole point is to scare the UK population into submission and into a vote to stay in the EU.
Among the warnings from the BOE’s fire and brimstone forecast was that the “Sterling is also likely to depreciate further, perhaps sharply. This combination of influences … could lead to a materially lower path for growth and notably higher path for inflation.”
Which is ironic: in a world in which every central bank is scrambling to crush its own currency, shouldn’t the BOE then welcome any event that will send the sterling “sharply” lower? Questions, questions…
Meanwhile, the torrent of doom and gloom “if Brexit happens” continues. As Reuters puts it, “British voters have faced a raft of reports from the government and international bodies in recent weeks warning of the dangers of leaving, and the International Monetary Fund is expected to weigh in again on Friday.” All of them have been uniformly bearish which likely means that the outcome from a Brexit would be quite favorable.
Kina like the cancer cells telling the patient that chemo will hurt his health while the whole time the cancer is killing him.